2019 (11) TMI 378 - AT - Central Excise

CENVAT credit - inputs and capital goods - MS Angles, MS Channels, etc., used for fabricating and installing the capital goods - HELD THAT - In the case of SAI SAMHITA STORAGES P. LTD. VERSUS CC. CE., VISAKHAPATNAM-II 2010 (4) TMI 484 - CESTAT, BANGALORE this Tribunal has held that Cenvat credit is available on such goods used in fabricating capital goods and the decision was upheld by the jurisdictional High Court of Andhra Pradesh in COMMR. OF C. EX., VISAKHAPATNAM-II VERSUS SAI SAHMITA STORAGES (P) LTD. 2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT . The appellant is entitled to the Cenvat credit - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility of Cenvat credit on MS Angles, MS Channels, etc., used for fabricating and installing capital goods.

Analysis:

1. Background:
The appellant, a manufacturer of Sponge Iron registered with the Central Excise department, availed Cenvat credit on inputs and capital goods. The department alleged irregular availment of credit on ineligible inputs and capital goods, leading to a show cause notice for recovery, interest, and penalties.

2. Previous Litigation:
Initially, the demands were confirmed, but on appeal, the matter was remanded for document production. In the subsequent round, the demands were again confirmed, leading to the current appeal against the denovo adjudication order.

3. Appellant's Arguments:
The appellant contended that MS Angles, MS Beams, etc., used in fabricating capital goods were eligible for Cenvat credit based on precedents such as M/s Sai Samhita Storages Pvt Ltd and M/s Gagan Resources Pvt Ltd. They argued against the denial of credit, interest, and penalties, asserting compliance with return filing obligations.

4. Department's Position:
The department reiterated the lower authorities' findings supporting the denial of credit on the disputed items.

5. Judgment:
The Tribunal examined the eligibility of Cenvat credit on MS Angles, MS Channels, etc., used for fabricating capital goods. Referring to precedents like M/s Sai Samhita Storages Pvt Ltd and M/s Gagan Resources Pvt Ltd, the Tribunal upheld the appellant's entitlement to the credit, setting aside the denovo adjudication order and granting consequential relief.

6. Conclusion:
The appeal was allowed, the impugned order was set aside, and the appellant was granted relief. The judgment clarified the eligibility of Cenvat credit on specific items used in manufacturing capital goods, aligning with established legal precedents.